In response to Kotaku's request for comment, Microsoft sent over this statement:

Polytron and their investor, Trapdoor, made the decision not to work on an additional title update for Fez. Microsoft Studios chose to support this decision based on the belief that Polytron/Trapdoor were in the best position to determine what the acceptable quality level is for their game. While we do not disclose the cost of Title Updates, we did offer to work with Trapdoor to make sure that wasn't a blocking issue. We remain huge fans of Fez.

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Less than 1% of users have been affected by the game-breaking error, according to Polytron.